The United States unveiled aggressive new sanctions against Iran on Monday, directly targeting the rial currency and the key auto sector, days before presidential elections in the Republic.
The new measures, which could spark more economic deprivation inside Iran, were accompanied by warnings of additional "powerful" and "painful" measures if Tehran refuses concessions in inconclusive talks on its nuclear program.
President Barack Obama signed an executive order authorising sanctions on foreign banks and financial institutions that make transactions in the rial currency or keep accounts denominated in the rial outside the country.
The ninth set of sanctions signed by Obama against Iran will also penalize anyone involved in the significant sale of goods and services to Iran's auto industry - a move that could hit foreign car giants in Europe and Asia.
"The steps taken today are part of President Obama's commitment to prevent Iran from acquiring a nuclear weapon, by raising the cost of Iran's defiance of the international community," White House spokesman Jay Carney said.
Another official said the strategy represented a significant escalation of the sanctions as, for the first time, Washington was attacking the rial, which has lost two-thirds of its value over the last two years.
"This promises to make Iran's weak currency, even weaker and more volatile," the official said. "The idea here is to make the rial essentially unusable outside of Iran."
Analysts said the new move by Obama was a sign that the administration was wedded to a strategy of ever increasing economic pressure on Iran as the showdown over its nuclear program hits a critical point.
"It's a serious escalation of sanctions because the administration is blacklisting the auto sector which is the second largest employer in Iran after the energy sector," said Mark Dubowitz, of the Foundation for Defence of Democracies.
Dubowitz also said that the move against the auto sector was a sign the administration was concerned it could be used to procure "dual use" technologies such as parts for centrifuges used to enrich uranium.
The announcement of new sanctions came as the campaign gathers pace ahead of elections on June 14 to succeed President Mahmoud Ahmadinejad.